International Investor Ted Bauman Points out Major Bitcoin Weakness

A financial industry expert, whose client list includes the World Bank, the United Nations and the government of South Africa, Ted Bauman brings more than 2 decades of experience in the investment sector when assessing the latest economic trends.

The graduate of State University of New York and Georgia State University earned his Bachelor of Science in Business Administration and MIS and his MBA from the J. Mack Robinson College of Business.

When it comes to sharing his wisdom on new investment instruments, the Banyan Hill Publishing editor of several financial newsletters definitely has a few things to say about the latest cryptocurrency market.

While lauding the new digital currency’s innovation, he points out that scalability issues with the way that transactions are written to crypto leader bitcoin’s blockchain should be serious cause for concern among investors.

A controversial topic in the crypto world, several alt coins have implemented changes to their own software to speed up the time frame from when a transaction is initiated until it is officially recorded in the blockchain with the critical authenticity stamp of community consensus.

As a basis for Bauman’s comparison of bitcoin transaction processing compared to more familiar examples, he points out that charge card giant Visa has the ability to process transactions at a sustained rate of more than 20,000 per second, with the average volume being in the neighborhood of 1,700 per second. The Visa user experiences an almost instant experience with processing of her card transactions. Read more about Ted Bauman at Bloomberg

Revealing where bitcoin falls short, Ted Bauman points out that the variability with transaction processing in bitcoin can be a few minutes to an hour or longer.

On average, bitcoin can handle 6 to 7 transactions per second, a huge difference between its own scaling capabilities and Visa’s.

It’s worth mentioning in the case of the hard fork to the bitcoin blockchain in the 2nd half of 2017 that transactions took hours to process, some not showing up until the next day. The ensuing community frenzy caused wild swings in the value of the bitcoin relative to fiat currencies, such as the USD.

Ted Bauman notes that one of the bottlenecks stems from the block size that bitcoin is able to process. He mentions that there was discussion of completing the earlier SegWit upgrades with the proposed SegWit2X upgrade late last year, which would have solved performance issues. However, Bauman also notes that SegWit2X received hard push back from the miners, blockchain software developers and other bitcoin project leaders, who cited security-based concerns.

Today, bitcoin maintains the same performance that it has had for its nearly 10 years in existence.

Other concerns Bauman has expressed about crypto currencies are related to their wide price swings and intra day volatility. More info can be found at https://tedbaumanguru.com/

 

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